Global| May 01 2019State GDP in 2018:Q4
|in:Viewpoints
Summary
Real GDP growth by state was noticeably faster growth in the Western part of the nation than in the East in 2018:Q4. No state east of, or bordering on, the Mississippi River had real growth in the top 10. Growth was led by a whopping [...]
Real GDP growth by state was noticeably faster growth in the Western part of the nation than in the East in 2018:Q4. No state east of, or bordering on, the Mississippi River had real growth in the top 10. Growth was led by a whopping 6.6% rate in Texas, followed by Wyoming’s 6.0% (the two states combined account for 8.9% of national nominal GDP—8.7% in Texas). The fastest-growing Eastern state was Pennsylvania, with a fairly moderate 2.5% growth rate. Large portions of the Western gains were driven by gains in mineral extraction (even in Texas, which often downplays its current reliance on oil and gas extraction, saw half its increase attributable to this sector). Of course, a number of Eastern states, including Pennsylvania, Ohio, Kentucky and, especially, Louisiana and West Virginia, also saw strong growth in this sector, but in general the gains contributed less to state growth than in the West, and other sectors (most notably in Louisiana and West Virginia) were on the soft side.
The distribution of growth for 2018 as a whole (2018 average vs. 2017 average) was broadly comparable to those for Q4, with Western states generally faster than the Eastern ones. Washington was the fastest-growing state (its 5.7% gain was substantially higher than number 2 Utah’s 4.3%). One Eastern state—Florida—did crack the top 10. For the year as a whole, energy extraction gains were less notable than in Q4, affecting the growth rank of some states. Alaska, in the top 10 for Q4, was the only state to report a decline for 2018 as whole (despite the rapid growth in Q4, mining was down in Alaska for the entire year).
The nominal GDP numbers for Q4 show that California set a milestone. Its GDP, at an annual rate, was in excess of $3 trillion. The four states with nominal GDP above one trillion dollars (Texas, New York, and Florida are the other three) together account for well more than one-third of the nation’s output. The four smallest states (Vermont, Wyoming, Montana, and South Dakota) account for less than one percent. This enormous divergence does suggest that rankings of real growth (such as Wyoming’s number 2 rank in Q4) don’t mean very much out of context.
Charles Steindel
AuthorMore in Author Profile »Charles Steindel has been editor of Business Economics, the journal of the National Association for Business Economics, since 2016. From 2014 to 2021 he was Resident Scholar at the Anisfield School of Business, Ramapo College of New Jersey. From 2010 to 2014 he was the first Chief Economist of the New Jersey Department of the Treasury, with responsibilities for economic and revenue projections and analysis of state economic policy. He came to the Treasury after a long career at the Federal Reserve Bank of New York, where he played a major role in forecasting and policy advice and rose to the rank of Senior Vice-President. He has served in leadership positions in a number of professional organizations. In 2011 he received the William F. Butler Award from the New York Association for Business Economics, is a fellow of NABE and of the Money Marketeers of New York University, and has received several awards for articles published in Business Economics. In 2017 he delivered Ramapo College's Sebastian J. Raciti Memorial Lecture. He is a member of the panel for the Federal Reserve Bank of Philadelphia's Survey of Professional Forecasters and of the Committee on Research in Income and Wealth. He has published papers in a range of areas, and is the author of Economic Indicators for Professionals: Putting the Statistics into Perspective. He received his bachelor's degree from Emory University, his Ph.D. from the Massachusetts Institute of Technology, and is a National Association for Business Economics Certified Business EconomistTM.